Further Information

Innovation

The way societies currently use resources is highly inefficient and wasteful. Therefore, taking existing products and tweaking them will likely result in marginal improvements. There is tremendous potential for radical innovation to create new products and business models that more fundamentally address resource effectiveness. Two key areas to focus on are ‘Cleantech’ (short for clean technologies) and service-based business models. Companies and investors are funneling billions into Cleantech sectors, to achieve breakthrough improvements in resource effectiveness. The table below provides examples of the technologies that are being pursued.

A second approach towards resource focused innovation is to create new business models that are based on providing consumers with the services that physical products can provide, rather than selling the products themselves. This concept aligns the interests of buyers and suppliers to reduce cost, limit resource consumption and environmental impact, and is known under various names, such as ‘servicization’ or ‘product-service systems’. Examples of this concept include car sharing services, and rental/leasing services for a wide range of products that are today sold in the ‘old-fashioned’ way which involves transfer of ownership to the customer. Examples include carpet leasing programs and photocopying / printing services, which charge customers by the page rather than selling the equipment.

Resource focused innovation can be a source of tremendous growth opportunities. To capture these opportunities, companies must take the following steps:

Identify the resource inefficiencies in the value chain they are part of

Start with a blank sheet to identify alternative ways to provide the same function, with radically lower resource requirements